Wednesday, August 10, 2011

Creating value from Intangibles

Most people learning to play guitar or piano are first taught about chords. You sing or play the melody with one hand but the harmony is all chords or "oom-pa" harmonization. The sound is decent, the desired sound is relatively easy to replicate, and the musical score easy to follow.

However, you will not sound like the original musician. Take two prime examples (that will make me seem older than I really am): Billy Joel and James Taylor. Though they use chords in their performances, most of their notes are individual, with each note building upon and enhancing each other. Their style is difficult to replicate, yet with practice they easily deliver the same performance at concert after concert. Occasionally they tweak the song a little, adding a riff here and there to surprise and delight fans, which challenge imitators to keep up.

Product managers in the software industry likewise have many standard tools available to them: Agile methodologies, quality assurance teams with their own methodologies, software developers, channel resellers, APIs for easier integration with partner technologies, websites and sales teams to sell and distribute software, marketing teams, and of the newest component - social media web sites.

Usually the product requirements are focused on what the software will do, and using musical terms to construct this analogy we'll call this the song melody. The people involved are the instruments, and the methods employed to organize the effort and create the performance are analogous to the execution of the performance.

Taking the analogy further, the concert experience depends not just on the performer or the score but technicians, lighting and sound technicians, accountants, event planners, transportation crew, ushers, marketing team, and staff local to the venue. In software products, this is the equivalent of the supporting staff doing customer support, administrative functions, marketing, packaging, integration, and the like.

Perhaps it is no surprise to experienced product managers that there are many pieces to coordinate to create value, but it may be very much a surprise that most product managers are still creating music with chords without taking advantage of the potential for differentiation in how the tune is delivered, and making the product experience difficult to replicate. Most do not take the time to develop the company expertise in less obvious yet valuable ways the way Billy Joel and James Taylor make every note count. Others fail to keep the value fresh the way Taylor adds a guitar riff that isn't in the album, making it easy for competitors to replicate the static value proposition and add value of their own.

The point is, software product managers (and really even product managers outside of software and entrepreneurs) have a lot to learn from musicians. Value differentiation can and should be more than the melody. It can be in operational excellence, quality, support, sales, marketing, partner technology integration, alignment with suppliers, alignment in the channel, or (and preferably) none of the above usual suspects.

A product, like a concert, is an experience, with every aspect of it being an opportunity to create value.